Who should qualify as a good Tenant for a Landlord?

The relationship between a landlord and a tenant can both be pleasant or full of conflicts. A saying, well begun is half done, is perfectly true in case of a rental deal between the two. The onus of well beginning however lies on the landlord. Before allowing a tenant to move into the property, landlord should thoroughly inquire and verify credentials of the tenant.

A lot of information must be collected from the tenant, his previous landlords and neighbours to decide whether he/she qualifies renting your precious property for use.

You may ask the prospective tenant to fill up an application and answer the queries truthfully.
Ask for important details which will guide you in taking a decision for renting your property.

Your questions can include:

1. Source of income
2. Address of business/employment
3. Monthly income
4. Bank address
5. Social security number
6. Number of occupants, their ages and status
7. Names and addresses of current and previous landlords
8. Reasons for leaving current property
9. Whether ever evicted from property
10. Whether ever convicted for any crime

Application should caution the potential tenant of legal consequences of furnishing false information.
Few questions may appear offending to the applicant, nevertheless it will buy peace of mind for you after renting the property.

Based on the furnished information, you should conduct thorough inquiry by visiting current and previous landlords and few neighbours. You should find out if the tenant is regular in payment of rent and had good relationship with neighbours. Verify information about employment/business.

A qualified tenant is one who pays rent regularly and coexists with neighbours peacefully. As per the law, a landlord must treat all tenants equally. You should therefore be reasonable and equally cautious in selection of your tenant.

UK’s eco-towns proposal faces legal hurdles

The plan to build up new eco-towns, announced by Gordon Brown earlier, suffered another set back. According to the legal advice published by the Local Government Association, the scheme will not withstand a legal challenge.

The Local Government Association will meet the ministers to request review of the process of approval which the government has drafted for building new towns. According to the LGA, use of new ‘planning policy statement’ for development of eco-towns will be against the law.

Gordon Brown had pledged creation of ten eco-towns when he assumed office of the PM in June, 2007.
James Strachan and John Steel QC opine that government is pursuing a flawed policy and process in its approach for the creation of eco-towns. They caution that government is providing strong reasons to the local authority to challenge its plan.

The opinion provided ammunition to the opposition parties who alleged that government showed disregard to public opinion and bypassed local planning process.  According to the shadow housing minister, Grant Shapps, Mr. Brown failed to garner potential support due to his cack-handed method of rushing through development.

The department for communities and local government totally disagreed with the LGA’s claim. The officials termed it as misrepresentation of government’s policy and asserted that eco-towns will have very high environmental standards and the applications will be considered adhering to normal planning process.

What are the Tax Incentives for UK Holiday Letting

The income accrued from letting a furnished holiday home is considered as the income from a business under the UK tax regulations. This income is treated differently from other incomes.

You can claim certain incentives, provided your property complies with the Inland Revenue rules. These rules are termed as Qualifying Tests.

As per the rules, your holiday home should be:
• Based in the UK
• Should be furnished for local accommodation
• Must be available for minimum 140 days for public holiday letting
• Should be actually let for minimum 70 days in a year on commercial rates (letting to relatives and friends on cheaper rates does not qualify for tax incentive)
• Customer’s stay for more than 31 days in the duration of 7 months not admissible
• Letting must be charged at full market value

Income from holiday letting is taxable, but certain types of expenses are allowed set off from this income. These include:

• Repairs and maintenance expenses
• Electric charges incurred on lighting, heating and air conditioning
• Decoration of the holiday home
• Management of property and cleaning costs
• Fees paid to letting agents and other legal expenses
• Insurance premium
• Interest paid on mortgage

You need not pay capital gain tax if you sell the property and the income is rolled over to another holiday letting property within 3 years.

It is advisable to consult a tax expert before deciding for holiday letting.

What should a student looking for rental accommodation do?

Students going away from their homes essentially need rented accommodation. Their task can be made easier if they take advice from senior students in their colleges or university. These students can provide lot of useful information about student friendly areas and the good landlords who rent homes on affordable rates. As a student you would prefer calm places with equally calm neighbours.

You might have to look for a bigger place if your group is quite large. If you intend to join other tenants where an additional separate room is available for use, ensure if you will feel comfortable with them or not and whether all the necessary facilities will also be available to you.

You should be very clear about the location of rented property depending on preferences such as proximity to university or railway station or markets and dining halls.

Most properties are available to students on a 12 months’ contract or less. It is better not to enter in longer contracts and bind yourself when a good alternate property is available on better terms.

The general perception about students is that they care less about cleanliness and upkeep of rented property. Make concerted efforts to keep your place clean, respect the landlord and keep formal relations with the neighbours so that you remain focused on your studies peacefully.

Tips which can make property letting a rewarding and happy experience

Property letting is one of the best options for getting a never diminishing return on your investments. Property letting guarantees continuous flow of income in the difficult periods. Buy-to-let has acquired great importance in the UK today. According to the British Property Federation (BPF), property letting can help solve the housing crisis in the UK in a big way.

According to the Federation, government’s research report points out 25 per cent rise in the demand for rented property compared to the privately purchased homes. It predicts further rise in demand with the increase in property prices.  In the backdrop of existing scenario buying a property and renting it or renting your existing home can be the best source of a good income.

But before renting property, you must take some precautions to make your property letting a rewarding and pleasant experience. Treat this as a business. Fulfil tenant’s needs and maximize your returns on investment. Know and understand your tenant and their lifestyle. A professional couple would look for a decent home and location and would readily pay higher rents.

Before showing your home to prospective tenants, keep it well organized to enable them to imagine how their belongings will fit in to it. Ensure that necessary repairs are carried out before showing the property. A well maintained home will fetch much higher rent than a badly maintained property.

Why selling a house and renting it back is popular in the UK

People buy property to have a home of their own for a life time. But life is always full of ups and downs. A time comes when circumstances force you to part with your home to fulfill some urgent needs. But it need not be a permanent parting. A widely availed option by the UK home owners is ‘sell to rent back’.

This option enables you to sell your home and still continue living in it. The factors which prompt people to opt for this sort of deal are many.

The foremost important factor is the financial emergencies of different nature. Sometimes it becomes difficult to pay mortgage, or some body in the family is critically ill and you need large amount to provide medical assistance. If one does not have big savings, the home property comes to the rescue. Sell to rent back prevents you from becoming homeless or saves your time and energy in seeking a loan to meet the emergency. Rent back arrangement unburdens you from the worries of payments faster than any other option.

Sell to rent back is popular among those families which want to live a comfortable life, free from the worries of making hefty payments. Smaller monthly rents provide lot of convenience in managing other household expenses. Most UK families seeking comfort are opting for this type of a deal.

Apart from providing financial relief, sell to rent back saves you from embarrassment which you might face while leaving home after the sale.

BPF demands radical reshaping of the UK housing market

The UK’s biggest property investors and developers, the British Property Federation (BPF) at its annual conference handed over a report titled ‘The Future of Renting’ to the Minister of Housing. The report has been submitted in reply to a review of rental conducted by the department of the UK housing ministry. The Federation has urged the government to take initiative in bringing about a radical change in the housing policy and the market to draw fresh investments that will tackle the accommodation crisis and prevent massive job cuts.

BPF calls it ridiculous to live with the situation wherein there is acute shortage of rented housing amidst increasing demand; and the builders are withdrawing from the market for want of buyers. According to BPF, creation of a corporate sector on the patterns of Europe can facilitate continuous investment in housing industry and make thousands of new homes available to public on rental and at the same time builders can sell their stocks to potential buyers.

The British Property Federation feels that market based approach needs to be applied to the private rented sector. It should be continuously expanded to meet the increasing housing needs. The sector should adopt a consumer law based approach as recommended by the Law Commission.

Avoid delays in renting your property

Do not keep your property idle, is the mantra that every property owner must keep in mind. The demand for rented housing is growing at an alarming rate while the construction activity is going on at a snail’s pace. Renting your property should be on top of your agenda if you own anything more than necessary for your personal use. If your property is located in an area which has higher demand for rental housing, do not wait. Find a good tenant and start receiving a steady regular income from your property.

In a situation where demand is much higher than supply, potential tenants do not hesitate to pay higher rents. Use this opportunity to let your property yield much higher than what you might have expected it earlier.

The rental properties fetch bigger demand if:
• They are located near Train or Tube stations
• Located near Main Bus stations or Schools and Colleges
• Located on high street and in the vicinity of shopping malls

Properties in such convenient places do not remain unoccupied. Hence you should avoid delays in renting it at good rates.

If you fail to get a tenant on account of location of your property in the area of less attraction, search on the internet to get access to thousands of prospective tenants looking desperately for rental accommodation. Invite them and make a deal if they meet your requirements after proper investigations about their credentials.

Rent Back Scheme reduces cash crunch without any inconvenience

Financial crunch causes lot of hardships in one’s life. Many times, you do not see any solution in sight and attempt to take harsh decisions which can make you suffer for life time. Being unable to get loan or pay debts can be very stressful.

Many people having owned a good house in prosperous days, start thinking of selling it when lenders come knocking at the door. But the solution is not that easy and beneficial from economic considerations. You have to hire the services of estate agents who usually charge heavy fees. You also require long term negotiations to get the right deal.

Under such conditions, sell and rent back scheme is the good option to sell the property quickly and rent back at the market rates or lesser rates if possible.

This is the best financial product when you are unable to get cash from anywhere urgently and do not like to shift to another place immediately after the sale. You can avail the option of rent back as long as you like to stay. It helps you pay off your mortgage by releasing the equity tied up in your property. This option is also very useful when you want to relocate or migrate for reasons other than finance.

Mortgage of property can earn you money

Many people in the UK who want to buy a property take the mortgage option which lets you borrow money and also own the property. There are different types of mortgages which you can select depending on the nature of property you own or intend to own.
One form of mortgage is the residential mortgage where your property is your home.
The other form is the commercial mortgage where your property is the premises of a company or a business.

As a landlord, you can rent out your property on buy-to-let basis under a mortgage deal.

A more popular mortgage in UK is the holiday home mortgage. Holiday homes are a great place to spend holidays, but they can also earn good money for you if you decide to mortgage it to other holiday lovers. Investment in holiday homes means you can use them when you want to holiday, and when it is not in use you can mortgage it to others and get steady income out of it. A holiday home also becomes a source income during retired life.

There are specialist mortgage intermediaries who render valuable advice on holiday home buying and mortgages. The location and the design of the holiday home make a big difference to its value. You should do proper home work before buying and mortgaging a property.